As originally published on Euractiv.
By Mariangiola Fabbri (Lagrande Solution), and Anna Ackermann (International Institute of International Development, Ecoaction Ukraine).

Multilateral donors and policymakers must ensure that supports for Ukraine contribute to ’building back better’ and set investment criteria for sustainable reconstruction.

This week the European Commission announced the first disbursement of financing via the Ukraine Facility, a EUR 50 billion support programme for Ukraine, running from 2024 to 2027, and channeling EUR 38.27 billion into supporting the state budget. The funding is critical for Ukraine, now in the third year of resisting Russia’s aggression, the state is out of money needed to cover the most basic social, healthcare and education costs. 

Without its partners providing enough funding to cover the shortfall in the official budget, the Ukrainian government will be forced to adopt extreme measures, including slashing public expenditure and printing money.

The facility should cater both to short-term state and recovery needs and medium-term reconstruction and modernisation of Ukraine. It is designed as a flexible instrument adapted to the unprecedented challenges of supporting a country at war and ensuring predictability, transparency, and accountability of the funds.

It also brings hope for a better future. Due in part to intensive engagement from NGOs and civil society organisations (CSOs) in recent months, around EUR 9 billion from the Ukraine Facility has been earmarked for green investments. 

Many provisions have been included to increase transparency and CSO participation in preparing, implementing and monitoring the spending of funds. The text also contains multiple mentions of compliance with the National Energy and Climate Plan (the draft of which was recently published by the Ministry of Economy), alignment with the goals of the Paris Agreement, climate and environmental acquis and biodiversity conservation with reference to the Convention on Biological Diversity.

This is about more than Ukraine’s accession to the European Union. The intention is clearly about ensuring a reconstruction and recovery process that delivers resilient, sustainable, and efficient solutions. A particularly urgent focus is needed on Ukraine’s buildings so that people can return to their homes and workplaces.

In January 2024, the Kyiv School of Economics reported that after almost two years of Russia’s full-scale invasion, more than 250,000 residential buildings had been damaged, along with 3,800 educational buildings, 420 hospitals and almost 600 administrative buildings. 

A more recent assessment from the World Bank  estimates the total cost of the damage to the Ukrainian building stock at over USD 50 billion, with more than USD 68 billion needed for reconstruction. 

With the war ongoing, talk of reconstruction may seem premature. But the reality is that hundreds of reconstruction projects – big or small – are ongoing. What’s more, green shoots are already emerging and the green reconstruction of Ukraine has already started, evidenced by the many projects including renewable technologies  supported by civil society organisations, municipalities and IFIs that help communities around the country to build back better.

This practice of incorporating sustainability is not yet required by national legislation, but across Ukraine, there is a growing understanding that energy efficiency and resilience matters. 

Indeed, building back better is fundamental to securing Ukraine from disruptions in supply of essential services, such as to provide electricity in war-damaged areas where blackouts or disruption to energy supply are common. 

In this context, a set of six investment criteria to guide the sustainable reconstruction of Ukraine’s war-damaged buildings from Brussels-based think tank BPIE, is a timely contribution. Building back better means reconstruction and infrastructure that strengthen the country’s whole energy system.

This includes well-reconstructed buildings as an important element in the country’s accession process. Critically, this is the time to prioritise investment in creating secure and sustainable built environments, places where people can thrive, and places that can welcome home the many who have been forced to flee.  

The investment criteria proposed by Lagrande Solution are designed to align with scenarios representing different levels of damage (minor, moderate, and heavy) inflicted by the war. These criteria advocate for directing investments towards projects that prioritise minimum energy efficiency standards for individual building components, including those damaged during conflict.

Furthermore, investments should prioritise projects incorporating technical building systems powered by renewable energy sources, aimed at enhancing overall energy performance of buildings. Additionally, considerations for climate change adaptation and material circularity should be integrated into investment decisions, emphasising the importance of resilience in post-war reconstruction efforts.

At this pivotal moment for Ukraine’s economy, society and future prospects, multilateral donors and policymakers have a responsibility to ensure money flows towards building better than before. Investment criteria that prioritizes sustainability is not a box-ticking exercise: it’s about meeting people’s needs:  for employment, independence, long-term security and resilience, and to restore hope and opportunity for the people of Ukraine.